Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/181464
Authors: 
Hein, Eckhard
Truger, Eckhard Achim
Year of Publication: 
2017
Series/Report no.: 
FMM Working Paper No. 6
Abstract: 
In this paper we discuss the relationship between the current account rebalancing in the Eu-rozone, income distribution and wage policies with a focus on the main surplus economy, Germany. We will illustrate how and to which extent German wage policies could be able to contribute to a more balanced development of the Eurozone and to overcome the export-led mercantilist German model. Our analysis and our scenarios will be based on stylized econo-metric results for Germany, as they have recently been obtained in the empirical literature estimating the German demand and growth regime based on post-Kaleckian models. We will focus in particular on the relationship between nominal wages and functional income distribu-tion, on the one hand, and between functional income distribution and domestic demand, on the other hand. We show that more expansionary wage policy can contribute to reducing the excessive German current account surplus, mainly through the domestic income-imports channel. However, wage policy alone will be overburdened with the task of rebalancing. For this, in particular more expansionary fiscal policies are required.
Subjects: 
Current account imbalances in the Eurozone
wage policies
distribution
exports
imports
JEL: 
E21
E25
E27
E62
E64
F45
F47
H62
Document Type: 
Working Paper

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